Rep. Maxine Waters has called on the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) to put a stop to bank mergers and acquisitions (M&A) over $100 billion while the Fed and the FDIC review their M&A approval procedures, according to a press release.
“I also urge your agencies to incorporate into your updated M&A review procedures a stipulation that you will always hold public hearings on any large bank M&A application, and that your agency seeks the approval of the Financial Stability Oversight Council (FSOC) and other relevant agencies, including the Consumer Financial Protection Bureau (CFPB), to ensure the resulting entity from a large M&A deal does not enhance risks to consumers or the stability of the financial system.” Waters wrote in a letter to the leaders of the three agencies.
Waters said in the letter that freezing incomplete mergers until after the review “will help ensure that a regulatory landscape that promotes the ‘healthy, vibrant and competitive banking markets’ that [Fed Chair Jerome] Powell has expressed support for is put in place.”
The current system is inadequate, according to Waters’ letter, with the Department of Justice (DOJ) having lax oversight and not denying any bank mergers since 2003.
Waters said in the letter that scholars and regulators have called for stronger framework before, including stipulations like more evaluations of financial stability risks and consideration of conflicts of interest. The latter is important because of the increasing consolidation of various industries.
Antitrust has become a common rallying point in the U.S. as of late, with a bipartisan bill in November introduced to make it harder for Big Tech to complete mergers.
Read more: Bipartisan Bill in US Senate Aims to Hinder Big Tech Acquisitions
The bill would allow the government to require companies to prove to a judge that the deals would be healthy for competition. This would be a change from the current ways in which the government instead has to show that a deal is illegal.
Sen. Amy Klobuchar, one of the senators who introduced the bill, said its intent is to fight back against companies trying to buy their rivals instead of competing.
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